>> Jeff Selingo: For the next little bit we are going to be talking about both of these books, but
mostly Rich's Revolution in Higher Education book and kind of talking about the landscape of
higher education. You talk about having a revolution. I guess the question is how much of a
revolution do we need in higher ed if on a scale of one to ten where would you put the current
state of higher ed? Ten being it's the best in the world and nothing has to change and one the
entire system has to be blown up.
>> Richard DeMillo: It's a good question. It's a story of contradictions. On the one hand if you
look at anyone's ranking of world universities, American universities dominate. Sixty percent of
the schools in the THE list of world universities are North American. It's the most copied model
in the world. The problem is that those excellent institutions educate less than 20 percent of
the people that go to college. So if you step back from that nice picture then look at higher
education as a system, there are these real islands of excellence, but the experience of most
college students really is an excellent at all. So we have these two worlds. And that's kind of
what's driving the interest on the part of the innovators that I talk about in this book at fixing
some fundamental issues with higher education. The question isn't so much why do we need a
revolution. I think we're sitting in the front seat of a car that is careening out of control. It's
heading in a different direction than anyone thought and I wanted to get that across to the
readers by focusing on the agendas of the people that are trying to make change. One way you
can do a book like this is to kind of summarize what's wrong and call for change. As I talked to
people doing the research for this book, I really thought that there was a barrier towards
making predictions. People just sort of didn't resonate with the idea of why should things turn
out that way. So I called sixty of my closest friends who I knew were trying to make changes
and said what are you trying to do. That I think was a way of getting over this hurdle of
avoiding being a fortune teller. If these people are successful, whether it's online delivery of
courses or new business models for reconstructing the social contract with universities, if this
group of people is successful the world will be fundamentally changed.
>> Jeff Selingo: So you talked about islands of excellence. Does that mean that everyone who
is not on those islands is sinking? Are we going to see a number of universities, as some predict
including Clay Christiansen out of Harvard business school, go out of business in ten years.
>> Richard DeMillo: Yeah. If not go out of business, fundamentally change their business. I just
saw an interview this morning with Andy Card, president of Franklin Pierce University. It's a
well-regarded university, an old university. The president is a former Chief of Staff for the
president of the United States. You would assume that he understands the mechanics of
running large organizations. They have slashed their undergraduate programs by almost 50
percent. So the contracts that they had with freshman coming into Franklin Pierce has been
fundamentally broken. And there is just story after story of institutions either selling
themselves wholesale to for-profit providers of education or contracting to the point where
they become different institutions than what they were supposed to be, what their alumni,
what their stakeholders, what their trustees imagined.
>> Jeff Selingo: So are we just going to see a growing divide in American higher education?
Because obviously at the top the most elite, most selective universities are more popular than
ever before. More people want to get into them around the world than ever before and at the
bottom or even in the middle you have people, today there is a list of schools that are still
looking for people to fill their seats in the fall. So is it just kind of a tale of two very different
higher education systems?
>> Richard DeMillo: It's a tale of inequality. You noticed that Andrew Young wrote the
foreword for my book and one of the reasons that and he was attracted to this story was that
as a civil rights leader he has had to contend with inequality across the spectrum. He looks at
inequality in education is one of the great evils of modern society. Yeah, it's actually be true. If
you're a single parent trying to get an associate's degree in a large metropolitan area, your
chances of success along that path are nothing like the freshman who enters Georgia Tech, who
enters University of Washington, who enters Stanford or Harvard where the pathway ahead is
pretty much guaranteed. That divide is only getting bigger.
>> Jeff Selingo: There's another divide. You mentioned University of Washington. You
mentioned Georgia Tech, both public institutions. We've seen, you talk about the rankings in
both of your books, but we've seen among the U.S. News and World Report rankings in
particular privates, all the changes in the top twenty-five have all been publics falling off and
privates going up. So is there a particular sector as we think about the future that you really
worry about and I preface this question by saying should we be worried about some of the
great public universities in this country? I mean one right here.
>> Richard DeMillo: I think so. I think if you look at the issues that the University of
Washington is contending with, issues of capacity and cost and access and continuing highquality education for the students who are increasingly unfunded to attend here, the capping of
enrollments in computer science, for example, is one of the symptoms of what happens when
these systems hit their capacity. Before we started you were mentioning your visit to the
University of California and the sense at UC Berkeley that they are going to make up their losses
in volume. Maybe you can tell the story about how it looks from the point of view of an elite
university.
>> Jeff Selingo: I was down in Los Angeles earlier this week where I was with a couple of
presidents of the UC system including San Diego and Berkeley and UCLA, all of which have
taken pretty major cuts from the state. And how have they made up those cuts? They have
increased their enrollment of out-of-state and out of country students, so they are taking more
international students. They are taking more out-of-state students who pay higher prices, and
especially international students don't come with any financial aid, so it's a real big boom in
terms of dollars. At the same time, California's population is exploding, continues to explode.
Most of the students who are coming down the pike are from underrepresented groups that
higher education has largely done a terrible job serving, and they come from first-generation
students who are going to have a hard time affording college. It was kind of an interesting
dynamic because you had them talking about how hard it is to get into the University of
California, how they are going far and wide now to recruit students. At the same time the
public university set up by the citizens and taxpayers of California and there are all these
students in the system today, not even mentioning what's coming down the pike, that can't get
in. It makes me wonder, and maybe you could talk about this in Georgia, it makes me wonder.
You kind of struck this bargain with the citizens of Georgia x number of years ago. Is the feeling
on campus well they haven't held up their end of the bargain by giving us money so we are not
going to hold up our end of the bargain?
>> Richard DeMillo: Surprisingly not. I hear that a lot when I visit other campuses. There is
surprisingly little of that at Georgia Tech. Georgia Tech has been very successful in building
endowments and as much as we complain about the budget pressures, the truth of the matter
is we really haven't gone through the same kinds of problems as other institutions have. The
things that concern me, I want to come back to this issue of the social contract, because you
talk about it in your book too. The things that concern me are the more visible parts of what I
think is broken in higher education. So because Georgia Tech has become more popular, our
application pool is increasing. It's increasing in quality. Our capacity hasn't increased, and so
we find ourselves now accepting 20 percent or less of the students that enroll.
>> Jeff Selingo: Let me ask you about this capacity thing. You can't increase capacity because
you have so many beds, so many seats, right? But yet we've been talking about the technology
revolution in higher ed for twenty something years. We've heard a lot about technology in the
classroom in particular and I want to talk about the last five years between your books in a
couple of minutes. Why have all of these changes in teaching methods, hybrid classes, online
classes, flipping the classroom, all that stuff, why doesn't that allow institutions to increase
capacity?
>> Richard DeMillo: I see a T-shirt for the online Master's degree in computer science from
Georgia Tech. This one program increased the capacity of Georgia Tech by 10 percent without
increasing costs at all. And it is all through a combination of doing what we do best which is
excellent pedagogy in computer science and the productivity increases that you get from doing
the courses well online. That's a pathway.
>> Jeff Selingo: So why don't more in your mind, as you've interviewed these innovators, why
in your mind haven't more universities adopted something? Not exactly like that, but have not
channeled more technology to help them increase capacity at a lower cost or the same cost?
>> Richard DeMillo: Yeah, a few reasons, one is that professors are pretty good at reading the
tea leaves and if you continue to increase the productivity of individual professors and the
number of students is constantly going down, sooner or later you're going to need fewer
professors. And people have noticed that. I think the honest answer is that governance has not
been terrific at most universities and, in particular, most large public universities. So making
the kinds of decisions that we made at Tech which is to try this out, let's put the Georgia Tech
brand behind the highest quality degree that we can offer to our traditional students and do it
in this form.
>> Jeff Selingo: There was kind of a big risk, right, because online education is still seen as, by
some if you look at the surveys, as second-rate. That was a big risk for you guys to do that.
>> Richard DeMillo: We had to put our brand at risk and the deal was that it had to be a real
prototype. We couldn't treat this as a funny one-off degree. The degree that you get when you
get the online Master's in CS is indistinguishable from the traditional Master's degree. So we
were willing to stand behind that and the university system was willing to stand behind that
without having an alignment from faculty to Chancellor. That's impossible to get. So this is
what I mean by governance being broken. You need to have that kind of alignment focused on
goals, rather than thinking about how to expand your out-of-state students to increase your
revenue base. It's much better to think about it inventive ways in dealing with the people that
you are supposed to educate.
>> Jeff Selingo: I want to go back in time a little bit. It's 2016, so let's go back to when you
were writing your first book, Launching the Center. I was at the birth of the center. It actually
was the first time I really heard much about mooks. You spent a lot of time on mooks that day.
As we look back on the five years, everyone always talks about how slow higher education is to
change. But as you look back on these last five years between these books, has it changed a lot
more in the last five years than it changed in the last fifteen or twenty?
>> Richard DeMillo: It's been remarkable.
>> Jeff Selingo: In what ways?
>> Richard DeMillo: I take this word revolution as kind of a literary device for describing what's
going on, but it really has been a set of revolutionary changes. I had a hard time in 2008 when I
started writing Abelard. I had a hard time finding a university president who was willing to back
the idea of online education in any aspect of their curriculum. And if they were going to do it,
they were going to offer it as a low-cost high tuition way of offloading students that they didn't
want to service. I couldn't find faculty that were behind it. I couldn't find people that are
willing to say there might be something wrong with the long lecture format. We've been doing
this for 800 years and it hasn't worked out particularly well for us. Doing this book, which was
four years later, five years later, I had a hard time finding anyone at any level in public or
private universities that was willing to back the idea of the long form lecture as the standard
mode of delivery. That sounds like a small thing, but you have to remember that we put tens of
millions of dollars into building these theaters that are really ways for professors to give
sermons to large groups of people. So that idea I think has largely been discarded as a way of…
>> Jeff Selingo: That's a big change.
>> Richard DeMillo: It's a huge change, and some of this I think turns out to be just pointing out
the obvious inconsistencies with that as a mode of delivery. From everything we know about
neuroscience, everything we know about cognitive science, if you had to design a way of
delivering educational content that was guaranteed to drive off students who needed to learn,
the long form lecture is what you would invent. You would take eighteen-year-old people. You
would put them in chairs like this, bring the house lights down and have someone who is not
particularly skilled at public speaking drone at them for fifty minutes. Every once in a while,
maybe if you are lucky, give them a test to figure out whether or not they learned anything.
>> Jeff Selingo: Like I always say about those large lecture halls, that was the original distance
education where those people sat. That was pretty far away out there. Okay. So five years ago
a lot has changed in five years. Let's now look ahead to the next five years. As you think about
the seismic changes happening in higher ed, where do you think the most effort is going to be?
We talked a lot about data analytics in the last couple of years. We've talked a lot about
unbundling the degree. We've talked a lot about stackable credentials. If we were here five
years from now and I asked you this question about the last five years, what would you be
talking about?
>> Richard DeMillo: A few things come to mind. One or two things you mentioned are
certainly high on my list. The idea that we are now to the point where the models that we can
develop of what a student is likely to do in the future based on data that we have gathered in
the past is getting very good. And you can think about personalized education that delivers the
right content to the students in a way that they can digest it. Some of this has to do -- in your
book you talk about the transition from thinking of college as a way to get a license to go out
and have a good life, to something else. I'm not quite sure what that something else is. That
notion of value, I think, is going to seep into higher education and fundamentally change the
structures, the institutions.
>> Jeff Selingo: No doubt about it. In fact I think it's already started to do that. He used to be
that it was kind of almost blind faith. You would go to college to get a degree and largely, I
graduated twenty years ago and when I graduated you had that degree. It was a golden ticket
in the job market. It was a signal. It largely still is a signal, but I think it has a lot more noise
around now. Employers I interview in my book trust it as a symbol of discipline. Somebody
started something and they finished it. Great, checkmark. That they don't see largely
embedded in it anymore the soft skills that they want, the ability to work in teams, and
problem solving and all the things that people used to think, or maybe they weren't. Maybe we
just call them out more often. People used to think were embedded in the bachelor's degree
and they are not doing that anymore. So how is that changing higher education and the
workforce? Now we see companies asking for soft skills in job that's much more today than
they ever have before. There was this analysis that Burning Glass did which analyzes job ads.
They scraped 20 million online job ads last year. Four out of five of them had the same top
twenty-five skills listed. And the top four skills were all soft. It was only one hard skill,
Microsoft Excel. If you know Excel, you're golden. But all the other ones were problem solving,
team building, all the soft skills that they don't believe kids come out of college with anymore.
So now parents as they think about, it's not I will send my kid anywhere at any price, which I
think up until about five or six years ago people just said higher education is worth it no matter
what, because they were looking at those average income over your lifetime. Now they are
starting to say where you go and more important, how you go, what you do with that time in
college, so I think that this whole idea of value is going to become much more important in the
next five years.
>> Richard DeMillo: And the trick is to get the generation of college leaders to buy into that
concept.
>> Jeff Selingo: Right, because most college leaders think, again, they think that higher
education should not be treated as a commodity.
>> Richard DeMillo: How many presidents imagine that shrinking the size of their
intercollegiate athletics program is the pathway to the next presidency? It goes in the opposite
direction. You want to grow. You want to show unbridled growth. You want to show lots of
donors excited about what you're doing. And the other measures which, to be honest, are
harder to get at become less important.
>> Jeff Selingo: In some ways it's -- you talk a lot about the rankings and the rankings in my
opinion have really set off this race, this arms race in higher education, to have more building,
more academic programs, more athletics, more recreational programs, the best dorms, the
best food service, more, more, more, more more, right, because everybody wanted to move up
in those rankings. Well now, first of all, it's almost impossible anyway. Everybody has tried it,
almost impossible. And those rankings tell us very little about the outputs of those universities.
So if we start thinking about the outputs, which I think data analytics and other stuff will start
telling us about it, I think this could fundamentally change how we view colleges and
universities. And we'll start picking the places that have the best outcomes rather than the best
inputs, which is really what we want from universities.
>> Richard DeMillo: There's a chapter in my book on historically black colleges. I noticed that
in all the books out on what's happening in higher education, almost no one wrote about
HBCUs. I went to Jackson State University, which was under severe pressure four years ago
with falling enrollments, declining state budgets, all the ills that you see in public universities
kind of come to roost in historically black colleges. And one of the things that was going on was
that they had a generation of leaders that were chasing Old Miss in Mississippi state. So you
take kids from local high schools and you stack them up against a big football school like Old
Miss versus Jackson State, which is a much more academic kind of place, and the kids were
immediately drawn to the time football schools. And Carolyn Myers who is the president
decided that she didn't want to compete on that basis anymore. She didn't want to compete
on completion rates. She didn't want to compete on measures that kind of skew things against
an institution like that. So they tore out the first floor of their library and put in a set of
technologies that are specifically aimed at active learning. So the kid who comes in to Jackson
State may not come in with the kind of critical reading skills, critical writing skills that they
need, but cleverly using the technology they built that up. And they built it up in a way that
makes sense for a black kid who is coming into college. Sociology course treats those parts of
sociology that are often not dealt with well elsewhere. And then they went out and recruited
the largest freshman class that they could. They made the deans financially responsible. They
tied compensation to recruiting the right kind of class. So they created the freshman class the
same way Harvard or Princeton would create a freshman class. They ended up with the largest
freshman class in history, against all scales the most talented freshman class, and they
promised them four years of support. That started them on a very different path. But Carolyn
had kind of abandoned the idea that Jackson State would be measured against the measures
that would matter for public research university. I think they're better off and I think they are
on a sustainable path. The question is, how do you do that? How do you get that fundamental
value redefinition into an institution?
>> Jeff Selingo: I notice you call them a small band of innovators. How small? And who are
they? Talk little bit about who are these innovators? Is there anything that ties them together
or are they all over the place at different types of institutions?
>> Richard DeMillo: I think to some extent it's a shared sense of social mission. If you want to
cut through all the differences, you know, the people I'm talking about range from the Daphne
Kohlers and Sebastian Funds of the world, two people that you've never heard about before,
like Carolyn Myers. What underlies everything that they are doing is a strong moral
commitment to universities being important to the fabric of American life. Kind of disregarding
the front page headlines that you hear about these places, there is a commitment, and the
commitment is to the things I talk about. Affordability, accessibility, doing it in a way that
actually improves the achievement level of students. So if you think about what Paul LeBlanc
has done in southern New Hampshire, he's isolated a group of students that were not being
well served by the top 20 percent, probably not being served at all. And he structured a
program that is useful to those students at this point in their lives. And it wasn't going to be
served otherwise. And there is just story after story of how this happens. The stories are really
kind of interesting. I go back to Michael Crow a lot both Abelard and in this book, and one of
the things…
>> Jeff Selingo: Michael Crow, for those that don't know is president of Arizona State
University.
>> Richard DeMillo: And a good friend of both of us. One of the things that you notice if you
engage Michael Crow for five seconds is that he kind of believes in his got that he has a
responsibility to reach into every household in the state of Arizona and provide something to
the citizens of that state. That used to be the standard idea.
>> Jeff Selingo: It goes back to what we were talking about earlier. He believes in the
publicness of public universities.
>> Richard DeMillo: Right. My small band is probably a few hundred people.
>> Jeff Selingo: Thankfully it's not a dozen.
>> Richard DeMillo: Yeah, it's not a dozen, and as I go to universities and talk to people that are
thinking deeply about these problems I realized that we are in the early stages of this
revolution. There are people who have taken this to heart and are internalizing it and trying to
bring it to more institutions.
>> Jeff Selingo: What are the hurdles to this change? You are pretty tough in the book on
things like tenure and shared governance and all the trappings of colleges and universities.
Does that mean that those things have to go away in order to fundamentally change higher
education? We've tried to reform them many, many times over the years, including
accreditation as well. And we haven't really done a good job at any of them. What are the
hurdles to having more than just a couple of hundred innovators and having thousands of
them?
>> Richard DeMillo: Incentives, clearly. If you want to rise in the ranks of leadership in a
university, the easiest way to do it is to imitate the people that are above you. So we have set
up an incentive structure that rewards presidents for making their institutions look like
institutions that are ranked above them. Accreditation is a huge hurdle. It's sort of interesting
that we set up an accreditation regime in this country that can't distinguish between a
university that graduates 0 percent of its students, of its freshman and one that graduates 100
percent. They all get accredited. It's very hard to find an institution that is put on probation or
loses accreditation because it's doing a bad job educationally. It's easy to find places that lose
their accreditation because their football coach is on the take or someone has embezzled
money.
>> Jeff Selingo: Not when it comes to what the University is all about, teaching and learning, it's
much harder.
>> Richard DeMillo: And you are seeing that regime crack. I think what Paul LeBlanc did by
getting competency-based education under Title Four of the Education Act, so need-based
funding for students that are going through southern New Hampshire College of America is a
big step forward. The institutions, I focus on tenure and not because I don't like tenure. I just
see tenure disappearing before my eyes. We already have half of the college faculty not on
tenure track, so the minority of faculty members in American universities are not going to ever
get tenure because they are not tenure type employment. And it becomes less and less
significant because market forces tend to take over. It kind of begs the question so how do you
guarantee academic freedom and that is a significant issue. But these issues that have become
institutionalized in higher education that have been barriers to progress, I think, are
disappearing. And then governance, I have this last chapter in the book where I talk about the
most horrific horror stories you can imagine that are due to ill informed and malicious
governance on the part of boards of trustees and presidents. That turns out to be something
that is very hard to get your head wrapped around, and probably not helped by technology. So
a lot of the book talks about the promise of technology. This is an area where social media has
broken down, I call it the age of the internet empire. It has broken down traditional boundaries
between institutions and so it's very easy to mount a campaign to keep a commencement
speaker out of a university. So why would you do that? Why would you not include alternative
voices in your institution? And these are the kinds of breakdowns in governance that I think
make it hard to see how we move forward without fundamental changes.
>> Jeff Selingo: We've talked a lot about institutions, but I actually outline in my book about a
growing new learning economy that operates outside of traditional higher education. I talk
about this idea that we've moved from rhetoric to the reality of lifelong education, that this
idea that you go to college or university one time in your life, usually early in your life, and then
you're done is over. Obviously, people have always gotten professional education, but as we
move more to a gig economy where are you going to get that from? You're not a full-time
employee. You're not necessarily part of an association that tells you what you need and when
you need it. So where are you going to get that from? You're going to get that from this new
learned economy that's growing up, the likes of which are the coding academies and the mook
providers, places like Lynda.com and others where you can get just-in-time education at a time.
What you think about all these other new players in higher education all of whom operate
outside of the accreditation system? None of them are accredited. All of whom have
unbundled the traditional higher education thing. They focus on one thing and one thing only
and they know exactly what they want to do. Here is going to be no football teams at edX. And
they know exactly who their market is. Do you think that this is the wave of the future? Do you
think that more of these entities will start to rise up, or do you think universities will say wait a
second. You are taking a piece of our business.
>> Richard DeMillo: Let me ask you that question. You talk about the future of bachelor's
degrees. Do you see bachelor's degrees as disappearing?
>> Jeff Selingo: I do not see bachelor's degrees disappearing. Where I think this is going to
have a huge disruptive effect is in professional Master's and certificate programs, because for
the most part those programs are what I would call fat. They require students to dedicate too
much time, effort and money and they give them way more than they need at the point in life
that they need it. The one thing I like about the boot camps is that they follow the model of the
military boot camp. They give you just enough to get the job, just like in the military. They get
you just enough to go into combat, but you're always going to add on to that over time. Where
the professional Master's degrees and especially the certificate programs, they give you
eighteen months or two years. They give you a multitude of courses and are very expensive,
and really all you need to get going is that slice of it. Yeah, you're going to need those other
slices eventually, but you might need them five or ten years down the road, when by the way,
they are going to be more useful because the economy and the job market is changing so much
you're actually going to need additional training anyway.
>> Richard DeMillo: So how about embracing those? Wouldn't traditional institutions want to
embrace that?
>> Jeff Selingo: You would think they would want to embrace them, but graduate professional
programs and certificate programs are cash cows for colleges and universities. They provide a
lot of revenue that then goes and subsidizes other things at the college or university. I think
this is one of the biggest hurdles to change is the way we financially operate our colleges and
universities. When I talk to people at colleges and universities, there are a lot of ideas that they
actually like, but it always comes -- or are good pedagogically. They say oh yeah, it's much
better to teach a freshman. We shouldn't be putting freshman in classrooms of 300 students
with a graduate student teaching them or an adjunct. They should be in small seminars, but we
can't do that because we need those large lectures to subsidize everybody else. So it always
comes down to great idea, but we can't do it for financial reasons.
>> Richard DeMillo: I've got a colleague who has always been suspicious of scale, suspicion of
anything that scales up the small classroom experience. And we had an amazing discussion just
a few weeks ago. I've always felt that the small class experience was a superior way to learn. It
was a superior experience for the students. It didn't occur to me until I read your book that it's
only superior if you're one of the students in that small class. And you know what? There's not
enough money to have enough small classes to make it. So you have this going back to the
inequality issue. You have a small number of people in what is arguably a superior educational
experience at the expense of a large group of people that are sitting in football stadiums getting
lectures from a distant figure.
>> Jeff Selingo: And again, if we see these graduate professional and certificate programs start
to disappear and go away, you know, we are already seeing graduate enrollment among
American students go down. The only thing that's keeping graduate enrollment consistent
overall…
>> Richard DeMillo: MBAs in particular are hurting for American students.
>> Jeff Selingo: I was just at Notre Dame two weeks ago and their MBA program has cratered.
Their enrollments have dropped so drastically, and now they're stuck with all of these highpriced faculty members that they made promises to, many of them tenured, and now what do
they do? So they're trying to figure out we have to create new programs, new business
programs that are not an MBA. We see that also with law schools. I think on the professional,
you know, I have a journalism undergrad. There are all these journals in schools out there and
there is no reason you need a journalism Master's degree, no reason at all. But one after
another creative journalism and public affairs and public relations and public administration,
there are just a multitude of these programs out there that are going to be impossible to help.
>> Richard DeMillo: All because the Columbia Journalism School, which is a graduate school is
the one you want to be like.
>> Jeff Selingo: Yeah, they wanted to emulate it. Do you want to take some questions from the
audience?
>> Richard DeMillo: Sure, yeah. I can't see the back of the room.
>>: I have a question that is somewhat related and there are two parts to it. One part is why is
it so expensive for like this next generation, the people in grade school and high school today,
they are facing extreme costs in getting a college education. And on the other hand, where has
that expense actually gone to the University? I used to think that maybe it was within the
department. Now some of the things are suggesting means that it's not even increased salaries
or expectations of professors, but other things. So maybe you can share something on both of
those.
>> Richard DeMillo: I devote a whole chapter to this in the book trying to lay out the economic
arguments in a digestible form. The answer seems to be in two pieces. One is about a third of
the cost increases are due to unrealized gains in productivity. We are one of the few industries
where technology has not resulted in productivity.
>> Jeff Selingo: It still takes one Professor to teach twenty students.
>> Richard DeMillo: Fifty minutes, a 50 minute lecture takes 50 minutes no matter what you
do. And the macro economic effects of that kind of ripple through higher education. If you just
look at that one aspect of cost, it's a huge driver. The other piece is there is almost no
investment. Imagine if Microsoft decided to not invest any of its revenue in the next
generation of products and improvement. Higher education has been doing this for 200 years.
We've had about a half a trillion of cost increases since 1985, to higher education in total.
There has been no indication that that half trillion dollars has been used to improve our
products. In fact, it's gone the other direction. We've gone through a half a trillion of cost
increases. Completion rates have gone down. Success rates have gone down. Any measure
that you want to choose, it's been a less than successful enterprise. And that's a governance
issue. That really has to do with the fact that every board of trustees, every university
president is presented with a seemingly unending stream of good ideas and they take them all.
If there was a modicum of attention being paid to why don't we look for those ideas that
actually improve the product that we are building, we might have seen different outcomes. But
we don't do that. So each of these investments that are made are designed to bring in more
revenue and the revenue never keeps up with the costs of running those programs. You get an
increase in cost; it's called revenue cap cost. Revenue cap cost says you are going to bring in as
much money as you can and spend it all this year.
>> Jeff Selingo: And there's no relationship in many ways between cost and price. So even if
something, even if you can figure out a cheaper way to offer something, you're not going to
reduce the price of it. We did this with OMSCS and it was really one of the business
breakthroughs that we had to do. The original idea was we would take the Georgia Tech tuition
and discount it by some level. And we couldn't figure out how to discount it. So we had the
idea of starting with a blank sheet of paper and building up the actual cost of offering the
program online. And of course, every time we didn't put a traditional -- so why aren't you
putting in nurses fees and there? Because the students are going to make use of the infirmary.
We don't need the charge of -- they are not going to come to football games so we don't need
to charge them the athletic fee. And so when you do that the cost of offering OMSCS came in
somewhere around $5000 and we weren't quite sure exactly what the cost would be so we
added a contingent on top of that and the number turned out to be about $6500 and that's
what we offer for. And the fact that we could do it in a very conservative university system
with a very conservative administration and still do it in a financially responsible way, I think
speaks volumes of what could be done.
>> Jeff Selingo: It reminds me of, you mentioned Paul LeBlanc who is the president of Southern
New Hampshire University and they started a competency-based program, meaning your
degree is based on what you know rather than how much you spend in the seat. But when they
were building that and I went to visit them, he wanted to charge $5000 or less for that
program. And he put that number up on a whiteboard and everything they did was aimed at
hitting that number or below it. So anything that they added that cost more than that, they
took it away, which is exactly the opposite of how everything else is designed in higher ed. You
just design it and then you say okay. What's the price of this? That's the price. That's it.
>> Richard DeMillo: And everyone who has tried to do this has come up with a number that is
significantly different than the tuition. Ben Nelson does this with Minerva. Ben Nelson started
with a blank piece of paper. Here's what we're going to do and here's what we're going to
charge students for and it turned out to be less than $10,000.
>> Jeff Selingo: The other issue that you didn't bring up is debt and how we have really
financed, especially the last fifteen years of higher education, the tremendous amount of debt,
institutional debt and student debt. But the other thing we rarely talk about the amount of
debt that institutions have taken on in this last decade.
>>: My intuition tells me that change is potentially likely to happen in segments. And the
segment could be a group of like universities, say public universities or private universities or
LeBlanc colleges or segments could be undergrad or graduate or could be a domain focused
technology or humanities or something like that. To what degree do you think it's likely that
the fastest changes are really going to be segment driven and to what degree are you already
seeing that?
>> Richard DeMillo: I have a particular point of view on the that's not widely shared, but I've
been doing this in industry academia and government for a long time. And the idea comes
from Buckminster Fuller. Buckminster Fuller's headstone somewhere Massachusetts where
he's buried says called me Trim Tab. And the word Trim Tab comes from Fuller's view of how
large organizations change. The analogy he makes is that in order to turn a large ship at sea,
the last thing you want to do is push against the bow of the ship. You are going to break your
engine and the ship is going to move at all. So the way you turn a large ship is you attach a
small piece of metal to the rudder. You move that small piece of metal. It creates a region of
low pressure. The ship is moving with great inertia in one direction so that that region of low
pressure grows. It pulls the rudder and turns the ship. So the metaphor he's talking about is
you don't change things in large organizations by taking, you know, the most hallowed
institutions head on. You find small projects. You find things that create regions of low
pressure that draw more people into it. And that's what we saw with mooks. The transition
from vilifying mooks every chance you get to our program, to the University of Illinois
programs, to all the programs that we are seeing startup around this idea is people being drawn
into a region of low pressure. It'll be interesting to see how you get those things going. We
chose graduate because there was less resistance at the graduate level, but it could have very
easily been at the undergraduate level where we did it too. But to do it in a way that gives you
a tangible result that people can look at. They don't have to imagine what the world is going to
be like. They can see what the world is going to be like. And they are drawn to those ideas.
>>: My question is along the same lines as Jim's. I think I'll make a comment first and then I'll
go to the question. In other circumstances market forces cause change. It one organization can
get to a patent or design, the rest are forced to follow. Now there is some inherent boundary
conditions for that for universities become quadruple the number of people even with mooks.
It's unclear exactly what the design is that allows you to force the universities. They are
geographically dispersed to follow your model or to move to a different model. So I would love
it to happen but I can see that it's unlikely. The question then in my mind goes to the 200 or so
agents of change or whatever, the people that you see that are making a difference, is that
critical mass or is this going to take another five times that before the system begins to move?
It's already moving. That ship is turning. You just need to wait and everybody is going to wake
up or we will be pointing in another direction.
>> Richard DeMillo: In my view of the world the things that can stop it are icebergs that you
don't anticipate, really dramatic economic shifts, really dramatic social upheaval. Those are the
kinds of things that could stop it. I think to a large extent what we're seeing in higher education
is driven by market forces. It has to do -- let me preface that. You have to understand that for
a large portion of higher education, market forces played no role whatsoever. Harvard,
Stanford could charge whatever they want for admission, for tuition, and they would have no
problem filling up their freshman class. It's the strange noncompetitive market that exists in
the bubble. The trouble is that ripples through all of higher education. That is an overlay to
why the market forces are hard to see and hard to recognize. But the issue of college debt, you
know, when I give talks like this in front of book clubs and bookstores and there are civilians in
the audience, it's all they want to talk about.
>> Jeff Selingo: Because college costs so much and why is that?
>> Richard DeMillo: Yeah. And what you're seeing is that even in a declining market, fewer
high school graduates, fewer high school graduates choosing to go to college. Those who get
into college choosing not to go, it's ultimately an economic decision that they are making. They
don't see their path forward as being enhanced with this degree and that's a market decision.
>> Jeff Selingo: Questions over here? In the back. You first and then you.
>>: I want to ask a couple of questions. One, do you have any data on the outcome of
programs like the OMSCS? I know the first couple of classes have graduated and I'm curious
about your success rate. That's one question and if I may ask another question, do you see any
alternative business models coming up in the education space that is not entirely reliant upon
charging for admission were charging per semester, but there's other cash revenue ways
[indiscernible]?
>> Richard DeMillo: So both questions that lots of people are intensely interested in. The
OMSCS, understand that we are only two years into it, so the data is really preliminary. But we
do instrument these courses and so we know, for example, what students are learning in the
courses, and of course we see the demographic data so we know how many students enroll,
how many students drop out. For any metric you want to choose, the OMSCS students are
performing at or better than the traditional program. We are not quite sure how to calculate
things like retention rates, but when I look at the figures I see retention rates among the
OMSCS students added ten points higher than traditional students. Students seem to be
happier. We certainly have online resources to gauge how students are satisfied with surveys
in these classes to say how happy are you with the instructor? How happy are you with the
course? We see those in the off-line and online space and students are genuinely happy. And
that's all pointing in the right direction. It'll take a couple of more years before we know what
the outcome is. The interesting thing for me in the data that we've seen so far is what it says
about the market for higher education. This program has expanded the market. My prediction
was that we would steal Master's students from other Master's programs. I turned out to be
wrong. What's happened is this program has expanded the market for graduate education in
computer science. That is, the students that are enrolling in our program are students who
would not normally have had access to a Master's degree, a high quality Master's degree in
computer science. And in the first year there was an 8 percent expansion. There's no reason to
suspect that it's not going to level out around 10 percent, which means that over a ten year
period we will have doubled the market for graduate education in computer science. Those
numbers are just now been put together, but we're pretty happy with it. The new business
model is a really interesting question. Right now we charge tuition. There's absolutely no
reason that you couldn't have a subscription model in which you subscribe to Georgia Tech core
University of Washington or university that gives you access to Netflix style all you can eat
courses and degrees. That would really change the way we operated. It would change the
finances. I am a proponent of restructuring Title IV funding, so Pell grant funding, to carve out a
portion of government funds that cannot be used for tuition. It has to be used for things like
advanced advising services, so specifically invest in the success of students that are getting Title
IV funding. It takes that money out of the mix for universities. It does severe damage to the
business models for many, many universities, but it puts the focus on student success, not on
contributing to bad management practices at the University.
>> Jeff Selingo: We have until 2:30, right? So we will make this the last question then. Go
ahead.
>>: A lot of the work that has been done in mooks so far is pretty much we have taken the
sermon style lessons and put them online and you watch the sermons online. But like how far
are we willing to go with reinventing the lesson and education format itself? Are we willing to
go to like one-on-one lessons, dynamic and active lessons where the system figures out what's
going to change and like taking maybe a project style approach across all fields like biology, art,
music, computer science, where you are learning your lessons and the system is learning about
who is learning and then changing the system accordingly? I say this as someone who just
graduated college in December and there are a lot of students who were actively thinking
about this and wanted to change it.
>> Richard DeMillo: I have to tell you that we do not just videotape lectures. Every course that
we offer in mook format is a purpose designed course that implements some kind of mastery
learning principle. And so the whole idea is that you have to, if lectures are really a bad way to
learn, then lectures videotaped are and even worse way to learn. So we don't make that
mistake. I think you're right if you look at the portfolio of books that are out there, you find
some very bad ones and some very good ones. I think it's moving very quickly through higher
education. The people in humanities that two years ago used to have my scalp for talking
about the stuff are now knocking on our door wanting to do English composition. We're doing
English 4 for non-English-speaking students by calling it how to write business e-mails in English
and it draws students in. And of course is a traditional English composition course. It's a
traditional liberal arts course. So I think things will sweep through that part. There will be
pockets of resistance like in any revolution, but you stomp those out later.
>> Jeff Selingo: Thank you for joining us everybody and please join me in thanking Rich for
writing this great book.
>> Richard DeMillo: And Jeff, likewise.
>> Jeff Selingo: Thank you. [applause].